Sales and Use Tax Annotations

Annotation 325.0083

(a) IN GENERAL—SHIPMENTS INTO CALIFORNIA FROM POINTS OUTSIDE STATE

325.0083Out-of-State Repairs. A company contracts with California hospitals to repair their medical equipment. The company's independent sales representatives pack up the equipment and send it to one of the company's out-of-state vendors to perform repairs. After repair, the equipment is shipped back to the hospitals by common carrier.

The repair parts were sold outside the state; thus sales tax does not apply. However, the company has independent sales representatives in California, and is thus a retailer engaged in business in this state. It is required to collect use tax on repair parts from its customers and to remit the tax to the Board. 2/10/95.

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